Dollar General Corp. (NYSE:DG)

Price to earnings (P/E) ratio

The P/E ratio exhibited variability over the six-year period, starting at 19.18 and increasing to a peak of 21.9 by early 2022. This peak represents the highest valuation based on earnings within the observed timeframe. Following this, the ratio declined to 18.67 in 2023 before slightly rebounding to 19.94 in 2024. Overall, the P/E ratio suggests fluctuating investor sentiment regarding earnings, with a notable peak and a subsequent stabilization near the initial value.

Price to operating profit (P/OP) ratio

The P/OP ratio shows a similar pattern to the P/E ratio but with somewhat less volatility. Beginning at 14.41, the ratio reached 16.32 in 2022, marking the highest valuation relative to operating profit during the period. Afterward, it decreased steadily to approximately 13.54 by 2024. This decline indicates a reduced premium on operating profit in the latest years compared to the earlier peak.

Price to sales (P/S) ratio

The P/S ratio initially increased from 1.19 in 2019 to 1.54 in 2022, reflecting a growing market valuation relative to sales. However, unlike the P/E and P/OP ratios, the P/S ratio fell sharply in the final two years, dropping below the original 2019 value to 0.86 by 2024. This downward trend indicates that sales growth or market expectations linked to sales performance may have weakened significantly more than earnings or operating profits.

Price to book value (P/BV) ratio

The P/BV ratio displayed a strong upward trend from 4.75 in 2019 to a peak of 8.39 in 2022, suggesting increased market valuations relative to the company’s book value. However, this was followed by a steep decline to 4.91 in 2024. This recent drop may signal a reassessment of the company’s asset values or overall market perception of equity worth, effectively returning the valuation close to the initial level observed in 2019.

Overall insight

Across the analyzed financial ratios, a common pattern emerges where valuations relative to earnings, operating profit, sales, and book value rose consistently until around 2022, highlighting a period of increased market confidence or growth expectations. Post-2022, the decline in all ratios, especially pronounced in the price to sales and price to book value measures, indicates a shift in market sentiment. This may reflect concerns about sustainability of sales growth, changes in asset valuations, or broader market adjustments affecting investor perceptions. The partial recovery or stabilization in P/E and P/OP ratios suggests continued moderate confidence in profitability metrics despite weaker signals from sales and book value perspectives.

The analysis of the data reveals several key trends in the financial performance and market valuation over the six-year period.

Share Price

The share price exhibited a notable upward trend from February 2019 through January 2022, rising from $117.47 to a peak of $229.63. However, following this peak, the share price experienced a decline over the next two years, dropping to $205.81 in February 2023 and further to $150.78 in February 2024. This pattern suggests significant growth initially, followed by a considerable correction or market adjustment in the latter period.

Earnings Per Share (EPS)

EPS showed steady growth from $6.12 in February 2019 to a peak of $11.1 in January 2021. After a slight decrease to $10.48 in January 2022, EPS rose again to $11.03 in February 2023, before declining substantially to $7.56 in February 2024. This indicates that although profitability improved significantly in the early years, recent earnings have faced downward pressure, resulting in reduced profitability in the most recent period.

Price to Earnings (P/E) Ratio

The P/E ratio fluctuated throughout the period with no clear consistent trend. It started at 19.18 in February 2019 and increased to a high of 21.9 by January 2022. Subsequently, it decreased to 18.67 in February 2023 but rose again slightly to 19.94 in February 2024. These changes indicate varying market sentiment and valuation levels relative to earnings, with no persistent expansion or compression trend over time.

Overall, the financial metrics point to an initial phase of growth in both market valuation and earnings, followed by some volatility in later years. The share price and EPS both peaked around 2021-2022, with subsequent declines highlighting potential challenges faced more recently. The P/E ratio’s fluctuation suggests shifting investor perceptions and valuation adjustments in response to these performance changes.

The financial data reflects several key trends over the six-year period for Dollar General Corp. The share price experienced a significant increase from 117.47 US$ in early 2019, reaching a peak of 229.63 US$ in early 2022. However, following this peak, there was a notable decline, with the share price falling to 150.78 US$ by early 2024.

Operating profit per share (OPPS) demonstrates a general upward trajectory from 8.15 US$ in 2019 to 15.19 US$ in 2023, indicating improved profitability on a per-share basis. This positive trend was interrupted in 2024 when OPPS decreased to 11.14 US$, suggesting a reduction in operating profitability in the most recent period compared to the previous year.

The Price to Operating Profit (P/OP) ratio shows fluctuations that reflect the market valuation relative to operating profits. Initially, the ratio increased from 14.41 in 2019 to 15.65 in 2020, indicating rising share price relative to operating profit per share. It then declined to 12.64 in 2021, suggesting a more attractive valuation or stronger operating profit growth. The ratio peaked again in 2022 at 16.32, coinciding with the highest share price, before falling to approximately 13.5 in both 2023 and 2024. The decrease in the P/OP ratio toward the end of the period implies the stock became less expensive relative to its operating profit, possibly due to the share price decline and the drop in operating profit per share in 2024.

Overall, the data depicts a period of strong share price appreciation and rising operating profitability up to 2022, followed by a correction in share price and an associated decline in operating profitability per share in the most recent year. The movements in the P/OP ratio reflect changing investor perceptions regarding the valuation of the company's operating profit over time.

The analysis of the financial data spanning six fiscal years reveals several noteworthy trends. The share price initially demonstrated a strong upward trajectory from US$117.47 in 2019, peaking at US$229.63 in early 2022, before experiencing a decline to US$150.78 in 2024. This suggests a period of market appreciation followed by a contraction in market valuation.

In terms of sales per share, there is a consistent increase over the years, rising from US$98.74 in 2019 to US$176.13 in 2024. This progression indicates ongoing growth in company sales relative to its shares outstanding, suggesting improving operational performance or expansion of revenue-generating activities.

The price-to-sales (P/S) ratio exhibits a fluctuating pattern. It rose from 1.19 in 2019 to a high of 1.54 in 2022, reflecting investor willingness to pay a premium relative to sales. However, this ratio then declined sharply to 0.86 by 2024, the lowest in the observed period, implying a decreased market valuation relative to sales. This could be indicative of changing investor sentiment, market conditions, or perceived future growth prospects.

Share Price

Overall growth from 2019 to 2022, followed by a significant decrease through 2024.

Sales Per Share

Steady and continuous increase, reflecting strengthening sales performance across all years.

Price-to-Sales Ratio

Increase until 2022, then a notable decline, suggesting shifting valuation metrics and market outlook.

Share Price Trend

The share price exhibited a consistent upward trajectory from February 2019 through January 2022, rising from 117.47 US$ to a peak of 229.63 US$. However, subsequent periods showed a decline, with the price decreasing to 205.81 US$ in February 2023 and further down to 150.78 US$ by February 2024.

Book Value per Share (BVPS) Trend

Book value per share showed a gradual increase from 24.73 US$ in February 2019 to 27.84 US$ in January 2021. Afterwards, it experienced a slight dip to 25.29 US$ in February 2023 before increasing again to 30.72 US$ in February 2024. This indicates an overall positive growth in the underlying equity value over the period, especially notable in the most recent year.

Price-to-Book Value Ratio (P/BV) Trend

The P/BV ratio rose significantly from 4.75 in February 2019 to a peak of 8.39 in January 2022, indicating increasing market valuation relative to the book value. This was followed by a notable decline to 4.91 by February 2024. The sharp drop in P/BV ratio primarily reflects the decreased share price combined with the recent increase in book value per share.

Summary of Insights

The data indicates that the market initially valued the company increasingly higher relative to its book value, peaking in early 2022. However, the share price correction over the last two years has brought the valuation ratio closer to levels observed at the beginning of the period. Meanwhile, the book value per share has shown a steady and robust increase, particularly in the latest year, suggesting strengthening of the company’s net asset base. Together, these trends suggest a moderation in investor sentiment or valuation multiples, while underlying equity strength has improved.